31 May 2009
Hi, How a partnership venture and Pvt Ltd company (with multiple directors) differ in company law/act. Need to setup one to do india+foeign business, kindly guide. What will be the timeline and expenses to setup one firm. Thanks, atul
As per the Companies Act, the difference between a Partnership Firm and a Company is as under:
1. A Partnership firm need not requires the registration under the Companies Act, while a Private Limited Company is required to be registered.
2. A Partnership Firm can be set up without any minimum capital while in Private Limited Company a minimum paid-up capital should be Rs.1 Lacs and subscribed by minimum 2 persons.
3. A Partnership Firm the liabilities of Partners are unlimited while in a Company it is limited to the paid-up capital of the Company.
4. A Partnership Firm can not sue or sued in its name while a Company can sue or sued in its own name in the Court.
5. There is no as such legal entity in case of a Partnership Firm while the company has its own entity apart from its members and directors
6. A Private Limited Company can be converted into a Public Limited Company can float a Public Issue in Future while it is not possible for a Partnership Firm.
However, a Company needs to comply with the requirement of RBI when it deals with Foreign Currency.
I think this will give you an idea for the formation of a firm or company for now.
If you have any further query, pl. feel free to contact.
CAclubindia
